The dollar index climbed above 100 on Thursday, approaching a ten-week high as investors grew increasingly worried that a further escalation in US–Iran tensions could drive energy prices higher and intensify inflationary pressures. President Donald Trump warned that the US would strike Iran “very hard” and suggested Washington could move to take control of Kharg Island in the near future.
At the same time, new data showed that inflation accelerated in May at its fastest pace in more than three years, with the Iran conflict contributing to mounting price pressures. According to the Bureau of Labor Statistics, the producer price index rose 6.5% year-on-year and was up 1.1% from the previous month.
In Europe, the European Central Bank raised interest rates for the first time in nearly three years, signaling that it could no longer delay action as inflation risks increased amid persistent geopolitical uncertainty. The euro was largely unchanged against the dollar.
